Target and Walmart just want to toy with you

June 8, 2018

American families spend more than twice as much on toys as households in any other nation worldwide, according to Statista—buying about $25.5. billion in doodads in 2015, alone; compared to second-place China ($9.5 billion). So, now that the  top U.S. toy chain, Toys ‘R’ Us, has shut its doors, the company is leaving a huge amount of retail business on the table ($11.5 billion in sales in its last full year of business).

Based on a June 4 report by Supply Chain Dive, other retailers—chief among them, Target and Walmart— are racing to fill that void before holiday sales begin. Both brands are adopting larger strategies —among them, website redesigns and new acquisitions to expand delivery capabilities. That also includes ensuring the proper amount of toys are on the shelf, as new consumers look online to fill the gap.

“Toy volume is up for grabs,” Walmart’s Chief Merchandising Officer Steve Bratspies said at the company’s annual shareholder meeting, according to Internet Retailer.

Target EVP and COO John Mulligan agreed during an earnings call, saying, “Our teams in toys and baby have increased their inventory investment to ensure that we can meet higher demand as other competitors liquidate and exit these categories.”

Indeed, industry players believe that the toy sector is strong—and that the bankruptcy in which Toys ‘R” Us finds itself was caused by bad management. When Supply Chain Dive recently asked its audience— executives in supply chain, logistics, and fulfillment that make important purchasing decisions for their organizations—who was to blame for the company’s financial downfall, fully 69% of 104 respondents said the bankruptcy was single-handedly caused by Toy’R’ Us.

In addition, some respondents emailed the news outlet to say it was not suppliers, or even online behemoth Amazon, specifically, that led to the retailers’ downfall, but competition in the space for Target and Walmart.

In fact, in a recent earnings call, Hasbro CEO Brian Goldner acknowledged that its network had grown over the past three years, to include a significant digital presence and 21,000 more retail stores despite “recent store closures at traditional retailers.”

“There’s a tremendous amount of disruption occurring across the retail landscape,” Target said in a statement provided to Supply Chain Dive.  “We will continue to invest to create an even b Target and are prepared to welcome new guests to shop with us at our stores and online at Target.com.”

Research contact: @EdwinLopezT37

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